Which statement is true about cycle stock?

Which statement is true about cycle stock?

• A. Cycle stock refers to inventory that remains constant regardless of replenishment.
• B. Cycle stock varies due to replenishment intervals and is not safety or pipeline stock.
• C. Cycle stock is the same as safety stock.
• D. Cycle stock represents all inventory in transit between locations.

Answer: (B)

Cycle stock is the portion of inventory kept to meet normal demand during the interval between replenishments. The amount of cycle stock changes because it depends on how often you place orders and how much you order each time. If you order in larger, less frequent batches, cycle stock increases; if you order in smaller, more frequent batches, cycle stock decreases. This stock is distinct from safety stock, which buffers against uncertainty in demand or supply, and from pipeline stock, which is inventory already in transit between locations. So, cycle stock varies with replenishment intervals and is not safety stock or pipeline stock, making that statement true.

Cycle stock is the portion of inventory kept to meet normal demand during the interval between replenishments. The amount of cycle stock changes because it depends on how often you place orders and how much you order each time. If you order in larger, less frequent batches, cycle stock increases; if you order in smaller, more frequent batches, cycle stock decreases. This stock is distinct from safety stock, which buffers against uncertainty in demand or supply, and from pipeline stock, which is inventory already in transit between locations. So, cycle stock varies with replenishment intervals and is not safety stock or pipeline stock, making that statement true.